There is no Blairite third way for Europe

Britain's presidency of the EU, which begins next month, comes at a portentous moment in Europe's history. The next decade's budgetary settlement; the Union's institutional architecture; the social and economic policies to be pursued - all are up for debate and redesign.

The long progress towards political unification, dressed up in the false logic of historical inevitability, has met its rightful end in the referendums in France and the Netherlands, and a new project must be fashioned instead. The plain choice (as we see it) is between a dynamic, open and entrepreneurial Europe of nation states and a defensive, decaying superstate. But Europeans differ sharply over which model to adopt.

From one point of view, therefore, we stand at a parting of the ways. But this is not the point of view adopted by Mr Blair. He is attempting to reconcile, in a harmonious third way, the divergent trends in European politics. Euro-sceptics believe that a "more flexible Europe" and "ever closer union" are incompatible objectives; Mr Blair does not.

There is no choice, he argues, between the "social model" beloved of the Franco-German bloc and the "reform" agenda championed by Britain and the countries of eastern Europe. In his statement to the Commons yesterday, the Prime Minister emphasised the need for a more competitive European economy. On Thursday, when he addresses the European Parliament, we can be sure he will proclaim his commitment to worker protection, welfare rights and the curtailment of capitalism.

In the world of Mr Blair there are no incompatible fundamentals - only positions that have yet to be "triangulated". This week's rhetoric sounds depressingly familiar, not least from the time of the Belfast Agreement, when the Prime Minister confidently argued that both sides would benefit from a deal; only later did it become apparent that an artificial political compromise only succeeds in papering over divisions in the short term, and widens them in the long term.

That said, we should not be overly churlish about Mr Blair's intentions. He does seem, in recent weeks, to have undergone an alteration in his ambition. Once it was his dearest wish to lead Britain "into" Europe, by persuading a reluctant electorate to love Brussels. Now it appears he wishes to make Brussels love Britain, and emulate our ways. He sounds serious when he says the EU should reform the Common Agricultural Policy. If he can make his counterparts recognise that globalisation necessitates opening up, not closing down, Europe's economies, he will leave a legacy worth boasting about.

Mr Blair's relations with the EU resemble his relations with the Labour Party. Once an enthusiast for socialism, his achievement was in fact to make Labour change its ways. He clearly now wishes to do the same for Europe. We are no unabashed enthusiasts for New Labour, but we prefer it to the Old variety. If Mr Blair can accomplish a similar transformation of the EU, it would be a start, at least.